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Wealthy vs Rich, Poor or Broke?

31/12/2019

Is there really a difference?
I was looking through the internet.
Seems like there's quite some difference.

Broke or rich... is pretty much in terms of a point in time.
Wealthy or poor is kinda like... a feeling, or a mind set.

A person can be broke, but not poor.
A person can be rich but not wealthy.

If you talk to people you may notice.
I know of people who are rich. They have a lot of assets. But they don't feel rich, they don't feel wealthy. Somehow they are always fearful, or they always feel money isn't enough. Their sense of insecurity is very high even though they have money and assets.

And yet I also know people who have less money than these folks, who don't feel like they are struggling. There are people who feel wealthy with less. They have enough, they are contented and they are people who are happy with life and overall, these people feel wealthy. Life is good for them.

And there are folks who don't have a lot. They may be broke or have very little cash on hand, but yet if you talk to them, they don't feel poor. They have a lot of hope in their lives, they know it's a passing period and that they will get themselves out of the situation somehow. Again I know/knew of someone like this, broke, but never considered himself poor. ("Knew" cos he's out of his rough situation.)

And then there's the broke and poor... No money, no hope, no will to fight anymore... Or dunno what to do to get themselves out of the situation.

In America, there are homeless people who have a job, who can't afford to rent a place or have a tough time getting a place to rent cos they may have poor credit scores. But they aren't poor. They are just in a complex situation where they can't find the opportunity to get themselves out of the homeless situation.
Are they poor? Are they broke?

Psychology or the mental state of a person may determine how different people handle each situation.

Does a lousy mentality/attitude result in a poor person?
Or is it due to someone being in a poor and hopeless situation for a long period of time result in a poor mentality and poor attitude?

How about for a wealthy person? Does more money make a rich person feel wealthy?
Or is a wealthy person just someone who has cultivated a state of mind which has made him wealthy?

I've seen rich people who feel poor, and they consistently feel they don't have enough.
I've seen rich people who have become fairly broke, relative to what they had previously, or somewhat just comfortable in normal terms. Doesn't look like they'll be getting rich again anytime soon.
I've seen broke people become comfortable, became broke again due to some decisions, and climbed out of it again to become comfortable again.

Mindset has a lot to do with it.
A poor person... could have a tendency to remain poor and broke. It's a mentality thing.
It's hard to break out of a mentality. And hard to break habits.
It's like losing weight. Even with counseling or advice... how easy is it for someone to lose weight and keep the weight off?
Now, don't misunderstand, I don't look down on poor people. Or broke people... I believe that they should be given sufficient help and guidance. But no one can live their lives or make decisions for them. And there's so much help that the government or counselors can give them.

I know of grassroot leaders who try to help some lower income/poor people. The government gives them heavily subsidized rental homes and maybe cash payouts, in the hope that they can overcome their rough patch. But some of these lower income, end up relying on the government help and just take it as part of their additional "income", and just settle in their new lifestyles expecting aid.
This grassroot leader also told me that there are other people who are given aid and they will find their way out of their bad patch. And as they don't have funds to distribute to everyone, they will help families who needs help for a period of time, but eventually they have to move on to other families cos they are looking for families who are able and willing to climb out of the situation.
They can't be consistently be pouring resources into folks who get used to the aid and cheap rent. As resources are limited, they have to utilize the resources on folks who are able to progress.

Then there's wealthy people. People who might be more willing to try and try again.
There are people who are fat, they lose weight, then they relax too much and gain weight again, but they aren't concerned, cos they know how to lose weight again, and they pick up good habits and lose the weight again, etc...
And... it's similar in finance, they earn some money, they lose some money, but overall, they have a confidence that they can get themselves out of the situation whatever the situation may be.
Do they need to be super rich to feel wealthy? Some do, some don't.
Remember I previously talked about many Singaporeans aren't actually struggling? And yet somehow people don't feel wealthy?
Think about it...

To end off...
How much of this is determined by birth?
How much is determined by family?
Can it be trained? I believe it can.
BUT... I also believe that some people learn better than others.
It's like fitness and health. Some people don't exercise can remain fit and slim, some people take more effort to keep fit. So same as physical fitness and training...
I think mental also can be trained. But... some people will have a harder time than others.

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A Consolidated Post on Insurance

30/12/2019

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Ok, so... I got a request to talk about insurance. So I'll share a whole bunch of ideas from previous posts and maybe add on some new stuff.

Here's some of my older posts on insurance
Insurance - Types of Insurance
Hospitalization plan and Eldershield
Why do you buy insurance - what people don't think about.
Why I think an endowment plan is a good product
Is healthcare cost too expensive in Singapore?

There are so many types of insurance, but actually, insurance is pretty simple.
All insurance are actually term policies, then they package it into something complicated.

Medical and healthcare insurance in Singapore is very simple.
Medishield life. This takes care of a lot of our healthcare needs and people can go to government hospitals.
If you want to upgrade, then you can buy from a private insurer then you can go and consult at a private hospital. This IS very expensive especially in the later years of life. I may consider dropping it when I get older.
Some people want to get a rider to cover the deductible. This is a personal choice. Personally, I don't have it, cos the rider is very expensive and I don't think I'll visit hospital much.
Overall, there's little to think about.
Everyone already has Medishield Life, the decision is whether to upgrade or not. And whether to buy the rider or not.
This is a term insurance, no money will be returned after the period ends, and will be adjusted every year to take into account rising healthcare costs. Some insurers are more expensive than others.
Who should get this insurance? Everyone needs this insurance. At least Medishield Life, which is automatic anyway. Upgrade or not, up to you.

Accident Insurance
Many people have this type of insurance. It's cheap. Just a few dollars per month.
This covers the insured if the person meets with an accident, loses a part of a finger, loses a leg, DUE TO AN ACCIDENT. If the person dies from an accident, the payout will be greater.
If the person dies from a critical illness, there is no payout.
Personally, I don't have this insurance.
Personally, I feel that many people don't really need this insurance, depending on the job we do.
Many of us won't be affected much if we lose a finger. Yes it would be nice to receive some money from it, but it really won't change our lives. Furthermore, most of us aren't in jobs that will cause us to lose a finger. And IF we did lose a finger, if we work in office jobs, we'll still be able to work as per normal.
It does get more troublesome if someone loses an arm or a leg, some jobs will still be able to employ such a person so, it may not may not impact the person much from a employment point of view.
Don't forget, this is only due to accidents.
Death benefit is greater, but also must be from an accident.
Personally, I feel this isn't useful for me. Since I already have my life insurance to cover me if I die.
HOWEVER, someone who might be impacted by such accidents needs to buy such insurance.
For example a doctor... Remember what happened to Dr Strange.

If he had bought accident insurance, he may not have become Dr Strange.
So someone who needs his hands or limbs to remain employed would benefit greatly from having such forms of coverage.
This is a term policy, means no money will be returned after the period ends.

Life Insurance
Ok, ALL insurance are term policies bundled together into complex products.
Life insurance is simple. If the person insured dies, gets total permanent disability (TPD - loss of 2 eyes, hands, feet, or a mixture), or terminal illness (when the doctor says the person has 6 mths to live, not to be confused with critical illness). Most life policies will pay out in any of these 3 scenarios.
How much to insure? It really depends.
Like what I say, insurance is not like buying chicken on discount.
$50/month cover for $500k
$90/month cover for $1 million
$150/mth cover for $2 million
If you don't need the $2 million coverage, it still doesn't make sense to buy the $2 million coverage.
The question is, are you buying insurance to help your family tide over a rough period to get their lives back together again.
OR are you buying insurance to help them HUAT when you're gone?

Also, I believe life insurance should decrease over the years. As a person's networth increases when their older.
Cos remember. Insurance is to cover for a person's loss of income.
If a young person 30 year old dies, he may have low assets and his family needs some support til the family gets their lives back on track.
But someone who is 50 years old with $2 million in his bank account... does he really need much more insurance? The family already has $2 million assets to help tide over their lives until they get back on their feet. Unless their lifestyles are so enhanced that they need $10 million insurance to be able to maintain their lifestyle. Which... well... I suppose it's their choice.
But personally, I think insurance should decrease as personal networth increases. Depending on a person's lifestyle and commitments.

Whole Life Insurance is basically, term life insurance + buying Singapore Savings Bonds.
It's almost the same concept. Depending on circumstances one may have better returns than the other. But SSB can be withdrawn at anytime without loss. Whereas an insurance policy can't be withdrawn without significant losses.
All you need to do is to subscribe to SSB on a monthly basis and hold it til you grow old. When the SSB matures, you can just put them all into SSB again.
Only good for $200k though.
As your money grows, depending on when you reach the $200k SSB limit, you can take out the money and buy into a bond ETF, which should potentially give a low volatility 2-3% return.

Endowment plan is also the same. Just buy a term life insurance + SSB.
It's just a shorter term whole life insurance product.
(The maths of endowment is... the insurer is calculating the probability of the person insured to 100% die at an earlier date, which is the date the endowment matures. Whereas the whole life policy, the maths is the insurer is calculating the probability of the person insured to die at around 88 years old or something like that.)
Similar product as whole life, just a shorter time frame. If you have the discipline to regularly buy SSB on a monthly basis.

Investment linked policies are basically, term life insurance + buy a fund, or a few funds.
So you can just open a brokerage account or even a regular savings plan with DBS, UOB, OCBC, they allow for small amounts of investments in some funds or stocks on a regular basis, although the brokerage is higher. But... well, still cheaper than paying for an insurance product.
There are simple ETFs available on SGX. STI ETF, there are also REIT ETFs, so... in the long term, I reckon these will do better than many of the other products offered by insurance companies which incur more management fees.

I believe almost everyone should have a life insurance policy. It's not always about death, cos there's always the chance of total permanent disability and having some compensation when being disabled is useful for life's challenges.
How much to insure is pretty much up to the individual.
For me, I don't insure a lot. It's not in the millions. Cos as I said, I'm not buying discounted chicken. I just want some coverage so that my family gets a bit of money to get their act together again. It's not for them to HUAT and enjoy their lives. Furthermore, as my assets have been increasing throughout the years, we need less insurance to keep our standard of living.

Critical Illness / Early Critical Illness
This is also always term insurance. Often, it's sold as a rider. But it's still term insurance. If it's a rider, it's just packaged together with something else.

Many people get heart attack, stroke or cancer these days. Some folks have said the probability is one third. I'm sure many of us know people who have had heart attack, stroke or cancer, so I reckon some form of critical illness coverage is useful.
Basically, this is to cover recovery costs of the illness.
Hospitalization should already be covered by the healthcare insurance.
So this additional coverage is pretty much to cover long term leave for recovery, or maybe additional medical bills which are out of the hospitalization which might not be covered under the hospitalization plan.

Critical illness is a bit tough to claim, cos the definitions are really strict and the illness needs to progress to a late stage before it's claimable.
Early Critical covers are more expensive but the policy is able to pay out when the person insured has early stage illnesses.
So it's a choice. For me, I have a bit of both. Cos, it's useful to have some money at each stage of the medical condition, after taking into account the cost of the insurance.
Of course buying ONLY early crisis cover is better, but it's more expensive.
So for me, I decided half half is more affordable.

How much to cover? It's pretty much up to individual choice.
For me critical illness is critical illness.
It's to help me with finances when I'm still alive but have a critical illness.
If I die from critical illness, then my life insurance will payout.
So I'm clear not to mix the two of them.

Who should buy it? I personally think everyone should have some coverage for this as well. Cos considering the probability of critical illness these days, my view is that some coverage will help if the situation arises.

And that's it... Insurance is pretty much so simple.
Most of the time insurance agents sell a story. Tell you a story about how your life should be and at what age you need what. How much you need to save for your kids, their college fund, your retirement, etc...
This is so they can sell more products and in multiple tranches.
IF... IF you have the discipline to save and invest, you can actually keep insurance costs very very low. Just buy some term insurance and invest the rest.

There's so many other products like retirement plans where they return the money to you in bits over 10 years, or unemployment benefits, etc... but in reality... most of us won't use this. OR with your own knowledge and discipline, you could just do it yourself for cheaper.
These products are useful. Different people different requirements of course.
But personally, I think many of these products are just there to confuse the customer and make them think of things that are highly unlikely.
For example, unemployment insurance. Yes it's potentially possible. But... I think even if someone has been retrenched, he can still find employment again, even if it's not within the same industry. So there's really no need to purchase an insurance product just for that.

*Note, please consult a trust worthy financial adviser for customized financial advice for yourself.
This post is a general post of my own views, which may or may not be suitable for your own personal circumstances.

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Do You Talk About Money?

26/12/2019

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Do you talk with your kids?
Have you had a financial discussion with your parents?
Do you talk with your friends?
How many people actually have a honest discussion with their financial adviser? But then again how many financial advisers can be trusted?
How did you learn about money?
How did you learn about savings and investments?

I think for many of us we don't talk with many people about money matters.
I learnt about savings from my dad. He talked to me about saving for a rainy day, being frugal, assessing the value of things and asking me to consider other options and opportunity costs before making a purchase. If I spend money here, means I don't have money to spend somewhere else.

And I further increased my financial knowledge in school. Where I majored in banking and finance.
So that's where I learnt more about investments, options, bonds, and other financial products.
I learnt a lot more about insurance from my stint with Prudential. I didn't do well as a financial adviser cos I just can't sell stuff that I don't believe in myself. The products are fine... except personally, I don't see why people would want to buy them, considering that there are other cheaper alternatives out there.

But when I look at my wife, the story is very different.
She hasn't had much financial training. She hasn't talked much about finances before meeting me. So the whole idea of money and what to do with it... basically doesn't exist.
Money is to be spent. People earn money, so that they can buy things and enjoy themselves.

And that's it... that's what most people think money is for.

Think about it.
If you somehow didn't get any financial knowledge. You may not know much about interest. Or compounding interest.
You may not know about insurance and how important it is.
You won't know about dividends and investing and creating a passive income stream.
You might hear stories about how your friend speculated in the stock market and made a lot of money and lost a lot of money. So it's natural for some people to view the stock market as a gambling house.

How many people view money as options?
No... I think most people just think of money as just to be used to buy stuff.
Whereas a lot of us, we view money as a lot more than that. If you've done quite a bit of reading into financial matters. You'll see money as options. The more money you have the more options you have. You can have the option to buy a car, but you don't buy a car. You have the option to buy an expensive meal. But you might not buy the expensive meal.
HOWEVER, once you exercise the option and actually buy the car, then your options decrease. Cos your money is now less. So there's less options.

And it's interesting. Where did most of us learn our financial knowledge from?
I'm pretty sure it's not from school.
Most likely, our financial habits are from our parents. We watch them do, or don't do, then we follow.
Many families view money as a taboo topic. They don't know how to talk about it. Don't dare to talk about it. It's as if talking about it will make it disappear. Especially the older folks, many don't understand money. And there's always a fear of the unknown. Such a confusing topic, and when people talk about it, most of the time it's to sell you something. Or one of their friends trying to take a loan from them.

Another place we learn our financial knowledge if probably from ourselves. We make our own mistakes and learn from them. Some people make mistakes and learn. Some people might not learn and just stay financially illiterate.
Or we may have interest and read up by ourselves and go online and watch lots of YouTube channels about finance and how to FIRE.

And the thing is... actually, we don't talk about money much.
Somehow it's not cool to talk about saving, waiting for investment opportunities, retirement planning, etc. How many friends do you talk to about money? Very little right? You all can talk about a lot of other stuff, but money and financial plans... not so much. Do you all even talk about insurance? Maybe you found a nice interesting insurance product and it's a good product. Would you share it with your friends?
If you see a friend going down a financial highway disaster, would you try to talk to them?

So... it's really strange. We talk about girls, food, cars, our children, our holidays, our work, how so and so is doing, etc... and yet, we don't talk about money. We don't discuss it and share ideas.
Heck, many families don't talk about it among themselves. They don't teach their kids good financial habits. Maybe cos the parents themselves don't have good financial habits?
Maybe the parents themselves don't understand money very well and... well it's human nature to avoid topics which you don't understand... like... I don't talk about astrophysics right...

So I really think people should talk more about money. Or be willing to discuss and talk to others and share ideas. You know... like I have a friend whom we talk about finances and opportunities and wonder why do people spend so much.
I mean... money and financial planning is such a large part of our lives and yet so many people don't understand it well. What it can do, how to plan for the future, etc...

And the big question is... WHY?!
It's just one of those things.

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How Your Brain Is Confused With Money

25/12/2019

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Merry Christmas everyone!

A really short and simple post today.
Just a short clip which I think is really worth watching and understanding how our brains think about money and being rational or irrational about money.
Just 7 minutes. It's a nice clip to promote awareness about how our minds perceive value and money.

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Spending €848 in a blink

24/12/2019

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That's S$1,272.
Not too long ago, maybe just a year or so back, I would have thought a lot about it before I went ahead with the purchase.
However, my mentality has changed quite a lot since a year back...

So... I just booked my tickets to Germany and 3 nights hotel stay. It's a really short trip. With only 2 full days. The arrival and departure dates are basically almost useless cos I arrive very late and leave very early.

The train tickets were really expensive cos we booked really really late. I'm leaving in 3 days time. So the price of the tickets were already jacked up due to the Christmas season where people travel around to go home to visit their family.

So, what were my options.
1) Don't go.
Going Germany isn't a need. I could just not go for the rest of my life.

2) Go in the later years of my life.
I could go when I turned 50+ when we have more time to travel around and explore Germany.

3) Go now.
Well... I said this before.
If I travel to Germany from Paris. The train and hotel is just S$1,272.
If I fly from Singapore, I'll need to take a 13 hour flight AND the flights will already be $1,500 per pax.
If I fly from Houston, I'll need to take a 10 hour flight and the flight will also be expensive.
So I decided that, at this point in my life, this would be the most economical way to visit Germany.
Sure, it would be cheaper if we had booked this 2 months ago, but... 2 months ago, things were really different. So as things change, we have to adapt to it.

Now... Do I really really want to go to Germany? No, not really. I do want to get a flavour of it. Just go and hang around, maybe take a day trip out to see a castle and drink some German beer and maybe eat some pork knuckle.
So a short trip there suits me. It's really expensive if I look at it from a per day point of view. But it's one of those things.
I reckon that if I didn't do it this round, I'll probably never go to Germany in my life, so I thought might as well do it. Since it's going to be a once in a lifetime thing.

My view of visiting many countries is pretty much good to have. It's nice to have been there once to see a little of the place. But if I don't get to go, I'm pretty ok as well.
I think it's somewhat important to go and explore other countries to see first hand what the country is about.
There are many people who think China is a third world communist country. But those who've been to Shanghai and Beijing know that China is fast catching up.

Similarly, people think of Japan as Tokyo and Osaka, but a whole bunch of Japan is farmland.
So it's really good to go overseas and see the place and understand the people.

Well... I think it's pretty amazing how have changed though the years.
I think if I look back, 2 years ago, I wouldn't have gone for this Germany trip. I'd have just wanted to stay still and not travel. Cos the €848 expense is considered pretty high.

Which made me remember what one of my old colleagues tell me. She's quite a matured lady. Not too old. But old enough to have seen people come and go, or grow up and change within the company.
She told me... "After working so long, you see a lot of things. People will change. Some people will remain the same. Some people will become nicer, some people will become not nice, some people who are frugal at the start may start spending a lot, some people who used to spend a lot may end up becoming very frugal as they grow older."

So... hey... who knows right... one year after this post... I wonder what other changes will happen in my life.
Even now as I read my old posts. It's intriguing the person I once was and the changes in my mentality just 1 year, or 2 years ago.

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Rising Expenses

23/12/2019

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Hmmm... I never thought that this would happen.

Ever since my Singapore trip, when I returned to Singapore in November, my expenses have really risen.
I haven't been tracking expenses anymore, cos it was pretty boring. Typically the same expenses with the main changes every month due to whatever happens in my wife's work.

However, when I went back to Singapore, our expenses really went through the roof.
Firstly, the trip back to SG itself was covered by the company. Cos it's our once a year "return home" trip. The company provides us a pair of tickets on economy class for that.
When we reached Singapore, we pretty much let it loose. As we were only back for 2 weeks, we basically used money to buy time. I was spending as though I was a tourist in Singapore. Not enough time, so we took Grab all over, went to eat out often, it was quite expensive. Over S$200 in Grab expenses and over S$200 in eating out expenses.
Was it worth it? Yes it was. Cos we didn't have much time in SG, a mere 2 weeks to catch up with friends and family, we pretty much just enjoyed ourselves when we were back.
That's what saving is for. Save and be frugal when it's possible and convenient. But when it's really worth it to spend, then spend. Else, what's the point in saving?

After returning from Singapore, we went to Houston for our recce trip to prepare for our move.
A lot of the expenses were covered by the company, cos the recce trip is for the both of us to scout the area to see where we would like to stay and get familiar with the area.
After being there for around 7 days, I quickly realized that things would be very different from Paris.
Most likely our expenses would increase.

Firstly, food is probably not going to be free anymore. There's a good chance that I wouldn't be able to find food as easily as I did in Paris. So I'm expecting an expense of US$200-US$400 per month in food expenses.

Housing in Houston will be covered by ourselves. She will get a fixed amount for housing allowance and we will rent our own place. Currently, in Paris, the lease is signed by the company, so we don't need to bother about the rent and any issues pertaining to it. This will change in Houston. We will have to sign the lease and everything will be under our name. The good thing is, if we manage everything properly, we might be able to have a bit of leftover allowance which can be used to cover utilities.

This is similar for transport.
In Paris, my wife's transport card is free for public transport. The company reimburses her for a monthly pass. This is quite common in Paris. Many companies will subsidize monthly transport for staff in varying degrees. Personally, I pay a little bit every month as I travel since I don't travel a lot.
In Houston, she will get a fixed vehicle allowance. Depending on what car we buy, new or old, fuel consumption, potential repairs, etc...
Buying a new car would be more expensive, but may have less repairs, buying an old car would be the other way round. Leasing a car has it's other issues, such as lease break clauses if we need to leave Houston before the time is up.
Once again, we might have a bit of leftover allowance which can allow us to cover other potential expenses.

Not to mention, the allowance for cost of living adjustment is LESS!
Yes... you heard that right.
My wife gets more cost of living adjustment for living in Paris, than when we move to Houston.
So... In Paris, we get more allowance, and almost all food is free.
In Houston, we get less allowance, and we are expecting food to be fairly cheap, but not free.

To add on, home internet in Paris is €14.99 vs US$29.99 a difference of around US$13. Houston is more expensive.
My mobile line is €4.99 in Paris but will increase to US$25 in Houston. An increase of around US$19.

I don't know the cost of electricity and water in Houston so I can't make a good assessment now.

As you all can see, there's a good chance that overall, our savings per month may drop.

So...
Some potential gains if I manage the housing properly.
Some potential gains if I manage transport properly.
An increased expense in food.
An increased expense in home and mobile internet.
A decrease in cost of living allowance.

If I think about it, there's a good chance I break even.
A fair chance to overall save less.
A fair chance to maybe get a little bit more savings.

Is it worth it?
Well... I don't think so much about this anymore. An additional or reduction of S$1k savings, more or less, really doesn't impact our overall lifestyle. If we project this into our future. It will compound into a large amount. BUT... it's not really important IF we keep our level of spending pretty normal.
This increase in expenses is really due to the move to Paris and Houston. If and when we get back to Singapore, things will settle down again and our expenses will drop to what it used to be.
Overall, we are still keeping a healthy savings rate which will accumulate well into our future.

Above all, I think, what's important is for my wife to enjoy her work. We both live our lives as full as we can and make the best of what we have currently.
I now understand more why some people are willing to spend more money.
Cos there's no pain in earning the money... Well, at least that's what my wife feels.
The idea that... "There's more where that came from".
For me, I still enjoy the frugal life. But if my wife wants to spend a bit more, these days, I don't think about it as much as I did previously.

NEXT...
Maybe we'll plan a quick trip to Germany before we leave Houston. It may be last minute, it may be more expensive. But when I look at the opportunity cost... it's actually cheap.
Cos... it may cost me more now, since we're booking it so late.
But think about it. The next time I want to go to Germany, how do I need to administer it?
Now, I just need to take a more expensive train ride, cos of late booking.
But next time, I'll need to fly in from Houston, OR I may need to fly in from Singapore, depending on when I visit Germany.
So logically, it makes to quickly take my trip to Germany NOW, when I'm still in the Europe region...
More expensive now as compared to IF we had booked it earlier... BUT still cheaper than if I wait for another time to visit.

Even more expenses... But I keep telling myself... It's ok, it's ok... it's just for these couple of years that we're overseas and here for posting. Better to do it now than to do it from SG. Else the expense is even higher... There's also going to be more travels when I'm in the United States... So even more expenses...

It's a weird feeling, spending so much... I'm not particularly used to it.
It's the kind of thing people do when they retire. You know... travel around Europe and US, etc...
But I guess we're just lucky that we get to do this on a reduced cost since we don't need to think about the flight as we are already near the location.

Hey, it's not like I'm here on a holiday K... But since we're already here, might as well travel around and hit these places before we get sent back. Then maybe next time when we are really retired, we'll just hang around in Singapore sitting downstairs at the coffee shop drinking coffee and grumbling about life... old fogeys like us may not want to travel around as much anymore in future.

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Prepping for Houston

19/12/2019

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So I've been busy recently.

Couple of weeks back, we went on recce to Houston to check out the area and determine where we wanted to stay. We initiated the renting process. It's the first time we're renting for ourselves.
In Paris, the rent is under the name of the company so things are a lot easier.
Whereas, for our move to Houston, we will be signing the contract on our own names.

Since we have no credit score in US, we also need to put in a lot of deposit. So there's the basic US$400 deposit, plus one full month of rent as total deposit for folks like us without any credit score.
Then there's the US$400 admin and registration fees.
Then I'll have to pay one month of rent before the start date.
Super high overlay even before I get there.

We'll have to pack our stuff all over again, which isn't much cos most of our stuff were already in boxes. After 5 months in Paris, we realized that we didn't really need much to live. Just a bunch of clothes and some toiletries and household items, plates, cutlery, pots & pans, etc.
The stuff most people/myself included have at home is really too much. We typically hoard so much stuff when more often than not, we don't use them.

Anyway...

I'll have to close my home internet and mobile phone line in Paris and cancel the electricity account.
We'll need to keep the Paris bank account open for the time being cos my wife still has some residual claims and salary to receive in that account. It's a bit troublesome cos we'll have to close the bank account remotely from overseas.

It's just the hassle of all these opening and closing of accounts, which are... not tough but troublesome, cos things aren't as efficient as in SG. Cos we had some issue cancelling some SIM card in Paris previously and they were charging us the monthly charge even after cancellation so there was some trouble communicating with them and asking for refund, etc. So I just hope that the closure of the accounts when we leave will be smooth and I won't have to follow up on anything when we're in Houston.

Then I'll have to reopen all these accounts again in Houston.
US bank account, electricity, home internet, my mobile plan.
My wife gets a company line when she's in Paris or Houston, so it's easier for her.
We don't need to open a water account for both countries cos water is included in the rent in Paris, and in US, the apartment will bill us separately for the water used. So no separate account needs to be managed.
For both countries, we didn't or don't intend to have cable TV. In Paris, the apartment came with a TV but we didn't use it and didn't subscribe to the cable in Paris.
In Houston, the place comes unfurnished so there's no TV, and we don't intend to buy a TV, cos... well, we don't use it. We typically watch stuff on our laptops. So no real need for a TV.

Then when we leave Paris, we'll need to arrange for a professional cleaning company to clean up the apartment before we leave. Since we're flying early in the morning, we'll need to arrange for cleaning one day before and then move to a hotel/temporary accommodation to sleep for one night before flying off.

When we go to Houston, we'll stay at a temporary apartment for a couple of weeks before we move to our rental place. We'll need to buy furniture and stuff cos apartments in Houston are rented "unfurnished".
Actually there's stuff already in the apartment.
Fridge, oven, microwave, dishwasher, washing machine and dryer are all available.
Toilets are pretty much ready to use. Cupboards are all in-built.
There is a large counter top which can be used as a dining table, but we'll need to buy chairs.

So once we reach there, the most important thing to buy is a mattress, then the bed frame, then a sofa and dining chairs, then dining and cooking equipment. Not a lot of stuff to buy urgently actually. Cos in reality all we need is a bed to be able to move in for the time being. We can always eat out for a start if we aren't ready to cook yet.

I've been reading up on cars in Houston. It's pretty much a necessity. There's no real form of public transport except for Uber. Cars are pretty much the main form of transport for most people. Parking is usually free except for only a few situations.
What most people don't realize is that cars are cheaper in other countries. Doesn't mean cars are cheap.
Yes, of course if we compare against Singapore, there's nothing much to say.
But now when I'm looking at cars, I'm looking at around US$6-US$10k. Sure that's nothing in SG.
BUT... I'll still have to fork out around S$10k+ in cash when I get one in US cos I don't have credit. And it's not worth taking a loan anyway. So it's not like it's really cheap.
(Not to mention I have to pay the deposit and rent when I initially go over.)
I'll be looking for a bigger car. Probably a Toyota Camry. Cos small cars are dangerous in Houston. People drive big cars and trucks there so if I'm involved in any accident... I'll need a bigger vehicle to provide some form of protection.
Remember what happened in the AYE accident? The Mercedes vs the other vehicles?
So yea... I'll probably need a stronger vehicle to stay safe.

I could get a 15 year old Porsche for around US$10k though... Super tempting but the repairs are expected to be very pricey after I went through the reviews.

I also realized that my perception of car maintenance costs is very off vs the folks in Houston.
I was watching Youtubes about car maintenance. What's a normal cost for car repairs and such in SG is super expensive as compared to the US.
In SG, cars are expensive. So paying S$50 for an oil change is no real issue compared to the overall price of the car. Or repairs in SG for S$200-S$500 is pretty normal.
But in US, cars are around US$6-US$40k, depending on used or new cars... based on this, repairs or basic maintenance take up a large percentage of car ownership costs.

Then there's guns... To get or not to get?
Better to own one and not need it, than to need one and not have one?
Texas gun laws are pretty liberal. So it's not particularly tough to get one. Not too expensive too. Cheaper brands can be US$200, a better gun can be obtained at US$500+.
We're talking about handguns not rifles.
Ammunition to practice at a range is also not cheap. Around US$0.20 per shot. So if I want to practice 100-200 rounds, it's going to cost US$20-US$40 per session.

I'm pretty much looking forward to my move.
It's a hassle to move, yes... packing, unwinding all the accounts, then moving over and opening all the accounts again. But I think Houston would be more fun than Paris. So I'm quite excited to go. But still stressed over the move. Cos there's so much admin to do and hopefully everything will proceed smoothly without any hiccups, else the follow up is just troublesome.

Living aboard is very different from staying in Singapore. It's different and I think more people should do it if they have the chance to. It gives a better perspective of life and what is normal to other people vs what is normal to yourself. Staying near family can be good, but it also can be bad. There are things you can do, or things you cannot do and overall... it allows people to learn more about themselves and learn more about others.

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Pretty toys

18/12/2019

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When I walk around malls, I'll see the nice pretty things.

I look at nice watches, nice bags, nice clothes, cars, nice Gundam model figurines, etc... Hey... I can appreciate them one k... it's not like I walk past a shop and think... "woah so ugly."

I acknowledge they are nice. But I don't want them. I have no desire to own it.

Hey, being frugal doesn't mean cannot like to look at nice things and cannot appreciate a well made product right.
And that's what baffles me. Why do people need to own something?
I know guys who see nice watches and nice cars and want to buy it.
Or ladies who look at nice dresses or bags, or other stuff and want to buy it.
WHY?

Off the top of my mind, I can think of 3 reasons. There are probably other reasons which I'm not aware of, cos... well I don't have such a mentality so it's hard to simulate why people want to buy stuff.
1) They like the idea and feeling of spending. It doesn't matter what the item is. Some people just like the feeling of spending money. SHIOK!
2) They like the idea of showing off the item to other people around them. Their friends, colleagues, etc... It makes them feel good when other people admire the stuff they OWN.
3) They really like the item and want to own and use it regularly.

Hey, if anyone wants to buy something, by all means they should go ahead and buy it if they want. I've nothing against that... we are all free people.

But personally, I have no desire to own many things. I like looking at them though. Some items are pretty.
Like I see a nice car... I also like the look of it. Whereas to own it... not so much.
I see a nice watch. I appreciate the craftsmanship that goes into it. The design, the movement, etc. But once again, buying it, no thanks... cos I'll just keep it in a vault and not use it. So... no point. Also, after I buy it, chances are, I won't admire it as much already.

Human minds like stimulation, change, seeing different things. I know if I buy it, I won't want to keep looking at the same watch. It's not as pretty anymore. It's nice to look at a range of watches and seeing the nicer ones. Whereas if I buy it, it will only be one and it's not so nice anymore without it's brothers and sisters to make it stand out.
By the way, I don't wear a watch. I never liked to since young.

I realized this early when I was young.
I used to want a Playstation/Sega Saturn, I thought of all the fun games I would play with it.
My mum bought one for me for my birthday or Christmas, I forgot...
After I got it, I didn't use it much. I just wasn't that into games.
But the idea, the dream of owning it and visualizing myself playing games made me desire it.
That's when I realized that... I didn't really like the product. I was just fantasizing about the idea in my mind, of me lying on my bed playing a game.
Which in the end, I didn't do, cos... well, I don't really play many games.
That's when I realized that I didn't really want the product. I just liked the idea.

BUT, I do recognize that there are some people who love to play games, so by all means if they use the product well, then buying one would make sense.
But for me, I just like the image of me playing games, when in reality I don't play games much.

Now, of course everyone has their own right to buy stuff for whatever reason they want.
And as always, I promote awareness and being more conscious about our decisions.
Can buy, spend all you want, but at least know why you're doing it.
Even if you want to buy it and show off, that's also fine. Then make sure you show it off a lot.
Don't buy already keep it in the cupboard.

Always liked looking at these... but nahhh... keeping it at home and having to clean them up regularly is a super turn off. I always like to walk around shops to look at them though.

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Comfort vs Luxury

17/12/2019

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I was having this discussion with my friend.
It's all subjective and relative.

Someone may rent a big place with a swimming pool and feel that's normal .
Whereas someone else might look at it and think, "woahhh, that's so luxurious."

And I think we all fall somewhere around what we personally feel is a normal to comfortable lifestyle.
For most of us we think being able to eat out is considered comfortable. Heck, for most of us, I think we should have the ability to eat out daily. Even though we might not eat out every day. That's fairly comfortable. It's the option to be able to do it.
Whereas a low income person or even a fresh grad may feel that's a luxurious lifestyle.

I feel that owning a vehicle in SG is luxurious. It's expensive and unnecessary. Even though we can afford it. But maybe to someone else, it's just basic comfort. Ya, even though some folks will acknowledge that it's not necessary. They may acknowledge that it's expensive. But to them, it's not particularly luxurious. Just a comfort.

I think that there are certain tiers of perceived lifestyle.
Tier 0, things are not good, you feel that you are struggling.
Tier 1, normal lifestyle. Things are ok. You feel you aren't really comfortable but no real struggles.
Tier 2, a comfortable lifestyle. Things are getting better, you can enjoy some comforts, eating out, taking Grab/taxi, etc.
Tier 3, living in luxury. You have no worries about finances, you can afford most of the things you want.

(Note, I even took it that eating out, taking Grab/taxi is only considered comfortable in my view. Although this could be perceived by someone else as a normal lifestyle OR a luxurious lifestyle depending on their own personal situation.)

The thing about this is... it's all relative and subjective.
It's relative to what you see others do. Also relative to how you compare against other people. Or when you compare your past vs your current, etc.
Subjective is... what you yourself feel. So different people feel differently about each situation.

It may or may not be related to hedonic adaptation/treadmill.
Like for me, even though I take Grab/Uber or drive, I still feel it's luxurious. Even though I'm able to afford it.
Whereas for some people, they may start off by thinking Grab is luxurious, then after using it for sometime, they get used to it and feel that it's just comfortable, and maybe even after an even longer time, they feel that it's just a normal lifestyle. And that if they lost this ability to take Grab, they may feel that it's struggling already.

When I discussed this with my friend, it felt pretty enlightening.
Cos... suffering or not, struggling or not, luxurious or not... is really in the mind.
Most of us are not struggling. Yes, there are some folks who are really low income and are having difficulty. But I think for most readers... they are doing pretty well.
But how they themselves define their lifestyle, it's up to them.
You can live a life of "luxury" or a life of "struggling" depending on how you define it in your own mentality.

For me... personally I think I'm living quite a life of luxury. Cos my baseline is quite low.
My perceived normal lifestyle is a small place to stay, cheap and fairly good food, to me economic rice everyday is fine, I don't mind taking public transport and I don't mind having to work. Wearing old clothes is ok with me. I don't really like/need to travel so I'm ok without it.
That's my perceived normal lifestyle.

So now that I pretty much don't need to work, stay overseas, have the ability to eat out, or take personal transport, etc... Woah really nothing to complain.
Even in SG I already felt I was having a great life already. Hmm... maybe it's cos I don't really want much...

How about you?
Have you thought about your own lifestyle recently?
Do you feel you're just normal? Or do you feel that you're bathing in luxury?
You're probably doing a lot better than many in SG but what do you personally feel about it?

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What Crises Are Gold and Silver Good For?

16/12/2019

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New word I learnt. Crises is the plural of crisis.

So... what kind of troubles are gold and silver good for? I'll just use gold for the rest of this article, else I'll have to type "and silver" too many times.
Is gold always useful in a crisis?

I'll be talking about paper gold, ie, gold certificates, ETF, gold stored in a vault managed by another company.
and physical gold, gold which you physically own and/or have easy access to, ie, gold under your mattress, in a safety deposit box where you don't have to make much arrangement to withdraw.

Let's look at some scenarios.

1) Hyperinflation or Country Currency Crisis (Except major powers)
This is the most likely scenario in our world. This has happened to many countries. Venezuela, Argentina.
After wars, South Korea, Japan, Germany had high levels of inflation.
During the Asian Financial Crisis many Asian countries had their currencies weaken by large margins. Thailand, Indonesia.

Ok, so these scenarios are highly likely in our lifetimes. The probability will see them again during the next 60 years is 100%. Might not be in your own country, but definitely will happen again somewhere on Earth.

So is gold useful in such situations. Depending on how you invest in gold.
For example, a gold ETF custodied by a reputable custodian listed in another country other than your own.
Physical gold would help preserve your global purchasing power as your country's currency becomes worthless.

HOWEVER... in such a situation, just holding strong currencies such as USD, EUR, JPY, CHF would also suffice. You could just buy a US S&P ETF and you'll likely be protected by most of the hyperinflation or currency crisis in your own country.
So in truth, this isn't a very big issue if you own a diversified global portfolio.
The thing about it is... we need to be prepared BEFORE the crisis. By the time the crisis hits, that's not the time to be buying diversified assets. That's too late.

2) Financial Collapse or Currency Crisis in Major Economies
Example if the US refuses to fulfill all of their debt obligations.
The whole world would go into disarray. Many transactions wouldn't be able to transact, millions of people would lose their fiat money.
Many banks would likely go bankrupt. Potentially, other countries may also go bankrupt. Since many countries hold large holdings of US treasuries.

Depending on how the situation pans out, maybe gold may end up as a de facto currency for trading as a medium of exchange.
Or maybe some other country could take up the mantle of having their currency be the main currency used by the world for trade.

In such a situation, I would think owning physical gold would be awesome.
Owning paper gold... may not be too good, cos it's usually settled in USD, so if that particular currency is going to be unstable, selling the gold and taking USD and trying to buy groceries wouldn't help much. It may be better to even hold Euros and try to buy groceries using Euros instead of USD... Assuming that you're living in the US.

In such a situation, I'd think physical gold would be best, cos I'll probably never know what impact this large scale currency crisis will have on other currencies and economies, so even if I hold Euros or Jap Yen, I may not retain most of my value.
Trade may still occur, society would probably still function, so gold may end up as a medium of exchange like in the old days.

This scenario is possible but highly unlikely.
Similarly, we'll need to own gold before any trouble happens.

3) Financial Crises. The Great Depression, the Great Recession.
During the Great Recession, gold prices jumped.
Whereas in the Great Depression, it's hard to talk about gold prices cos it was pegged to the US Dollar at that time.

I think going forward, gold would do well in such financial crises. When all asset classes drop, there's a good chance that gold and cash may be best things to hold, to wait for the buying opportunity.

4) War
Small wars or big wars?
Small wars would be things like what happened in Korea where only a region or country is involved. In such a case, physical gold would be highly valuable as a trading medium in the country of trouble.
However, a global diversified portfolio also be able to preserve wealth for such a situation.

For big wars like world wars...
Well... I suppose it depends on what country you live in. Most of the time, gold would be highly valuable as the government may be printing money to fund the war. This is why typically during and after big wars, there will be times of high inflation.
Owning gold during and after world wars would likely be a good back up strategy.

5) The World comes to an end scenario. Max Max, The Walking Dead, Nuclear war
Well... at first glance, one may think that gold would be most useful in such a situation.
HOWEVER, in this scenario, gold is absolutely useless.
In this scenario, gold is no longer a currency. It is just like any other commodity. In this case a hunk of metal.
Society has pretty much broken down, there may be light trade between people but unless you have something useful to someone else, they probably won't want to trade with you.
In a zombie apocalypse, no one is going to care about gold. If you think that you're going to buy my egg laying chicken for 500gms of gold, which is worth around US$24k in current gold prices... you'll be dreaming.
The 500gms of gold is just going to be deadweight. A chicken is survival.
In such a situation, if I owned a gun, would I sell the gun to someone else for 5kg worth of gold?
ABSOLUTELY NOT!
The gold is worthless.
Not to mention if I sell someone the gun, he's gonna use the gun back on me and take his gold back anyway.
Gold in such a end of the world scenario would be pretty much useless.

UNTIL... mankind regroups and builds society up again. Then currency will come back into play for trade and as a medium for exchange.. THEN... gold would likely be very valuable at this point in time.
But before that, staying alive is much more important than keeping a chunk of metal sitting around.
So for this situation, owning a gun would probably be the most important thing.
Next is survival knowledge and food and water resources.

Conclusion
As you can see, actually, the uses for gold is pretty much muted. It's not particularly a crisis hedge.
Many times, just a global diversified portfolio would be able to shield someone from most crises.

If it's a localized issue, then a global diversified portfolio would be good enough.

If it's a global issue, then probably it would be good to store/hoard some physical gold.

If it's an economic crisis, gold is probably good as a store of value.

If it's the end of the world. You'll need a gun. With a gun, you can get gold, food, water, and a lot of other necessities.

So it's like buying insurance. To understand what the insurance is for. Buying gold may be for diversification or as an "insurance" for certain crises... But gotta know what kind of problems this insurance can cover. Else buy "insurance" also for nothing.

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